A full-length ds DNA copy of an influenza A N2 neuraminidase (NA) gene was cloned into the late region of SV40 in a hybrid expression vector that includes pBR322 plasmid DNA sequences and the SV40 early region and SV40 late region mRNA intervening sequences thought to stablize late mRNA transcripts. The cloned wild-type NA was shown to be present in the cytoplasm of fixed cells and at the surface of "live" (unfixed) cells by indirect immunofluorescence using N2 monoclonal antibodies. Immunoprecipitation of 35 S-methionine labeled proteins from recombinant-cells using heterogeneous N2 antibody showed that the product of the cloned NA DNA comigrated with glycosylated NA from influenza virus infected cells, remained associated with the membrane fraction, and could form an immunoprecipitable dimer. Using a low molecular weight substrate for the NA that releases a fluorescing moiety upon hydrolysis, NA enzymatic activity was detectable after SV40 lysis of vector-infected cells. These properties of the product of the cloned wild-type gene were compared to those of the polypeptides produced by three deletion mutant NA DNAs that were also cloned into the late region of the SV40 vector. These mutants lacked 7 (dlk), 21 (dlI) or all 23 amino acids (dlZ) of the amino-(N-) terminal variable hydrophobic region thought to anchor the mature wild-type NA tetrameric structure in the infected cell or influenza viral membrane. Comparison of the phenotypes of these mutants showed that this region in the NA molecule functions not only in membrane anchorage but also as a signal sequence, permitting entry of the nascent NA polypeptide into membrane organelles for glycosylation.